Senate bill would extend the 20-cent small biodiesel credit through 2029 before its December expiration
The tax credit that pays small agricultural biodiesel producers 20 cents a gallon runs out at the end of December, and two senators want it kept through 2029. Chuck Grassley (R-Iowa) and Amy Klobuchar (D-Minn.) introduced a bipartisan bill Sept. 30 to extend the Small Agri-Biodiesel Producer Credit, the narrow break that covers the first 15 million gallons a qualifying small manufacturer makes.
What the credit does
The math is small and specific. Twenty cents a gallon on the first 15 million gallons works out to about $3 million a year at the cap, and only for producers that meet the "small" definition. For a plant running on thin margins, that $3 million can decide whether the year closes profitable or at breakeven. It does nothing for the large players, which is the point. The credit was written to keep small ag-based producers in business.
The expiration date creates a planning problem right now. Small plants budget their next year in the fall, and a credit that vanishes Jan. 1 forces them to run the numbers two ways until Congress moves one way or the other.
Clean Fuels, the biodiesel trade group, is pushing the extension. Kurt Kovarik, the group's vice president of federal affairs, is making the case for the smaller producers the credit was built around.
The timing matters for anyone buying biodiesel to blend. If the credit lapses and small plants pull back, regional supply could tighten in markets that lean on them, and the feedstock mix may shift toward whoever can still produce without the break. Whether the bill moves before the recess is the open question. Bipartisan sponsorship helps, but a standalone fuel-tax extender rarely moves on its own.
The EDP sale
Pritzker Private Capital is exploring a sale of propane distributor EDP that could top $1 billion, according to Private Equity Wire. Nothing is signed. A deal that size would put a large book of retail propane customers under new ownership heading into heating season, and for haulers and dealers who supply or compete with EDP's footprint, the buyer's identity is what counts. Private equity ownership tends to mean tighter pricing discipline and route consolidation.
What to watch
The Dec. 31 expiration is the hard date. If Congress lets the small-producer credit lapse without the Grassley-Klobuchar extension, watch whether small plants cut runs in the first quarter. On propane, watch who Pritzker lines up for EDP and whether the price holds above $1 billion once the books open.